Automotive retailer Lithia Motors (NYSE: LAD) will be announcing earnings results this Wednesday morning. Here’s what to look for.
Lithia missed analysts’ revenue expectations last quarter, reporting revenues of $9.20 billion, flat year on year. It was a mixed quarter for the company, with a solid beat of analysts’ EBITDA estimates but a significant miss of analysts’ EPS estimates.
Is Lithia a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting Lithia’s revenue to be flat year on year, slowing from the 7.2% increase it recorded in the same quarter last year.
Heading into earnings, analysts covering the company have grown increasingly bearish with revenue estimates seeing in majority downward revisions over the last 30 days. Lithia has missed Wall Street’s revenue estimates multiple times over the last two years.
Looking at Lithia’s peers in the automotive and marine retail segment, some have already reported their Q1 results, giving us a hint as to what we can expect. CarMax posted flat year-on-year revenue, beating analysts’ expectations by 3.9%, and MarineMax reported a revenue decline of 16.5%, falling short of estimates by 14.7%. CarMax traded down 17.5% following the results while MarineMax was up 1.6%.
Read our full analysis of CarMax’s results here and MarineMax’s results here.
There has been positive sentiment among investors in the automotive and marine retail segment, with share prices up 7.7% on average over the last month. Lithia is up 12.6% during the same time and is heading into earnings with an average analyst price target of $364.60 (compared to the current share price of $276.75).
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